Milbank successfully represented an ad hoc group of crossover lenders of Skillsoft in the company’s Chapter 11 proceedings. Skillsoft is an educational technology company and global leader in corporate learning that produces learning management system software and content. The ad hoc group holds over $1.1 billion in Skillsoft debt.
On June 14, 2020, after entering a restructuring support agreement with over 80% of its first lien lenders and 79% of its second-lien lenders (including the ad hoc group) on a prepackaged chapter 11 plan of reorganization (the “Plan"), Skillsoft filed voluntary petitions for chapter 11 relief in the US Bankruptcy Court for the District of Delaware. Skillsoft filed the chapter 11 cases to address imminent liquidity needs and to equitize the vast majority of its prepetition debt.
Prior to the petition date, Skillsoft and its lenders, including the ad hoc group, were engaged in negotiations with an interested party (the “Interested Party”) to pursue a value maximizing sale of the business that had the potential to result in a substantially improved return to the Skillsoft lenders, but the negotiations had not progressed far enough by the petition date to permit Skillsoft to file its chapter 11 cases on the basis of completing the potential sale in chapter 11. The Milbank team was instrumental in facilitating an amendment to the prepackaged Plan that permits Skillsoft to pursue and complete the sale to the Interested Party after its chapter 11 cases were completed.
Fewer than two months following the petition date, on August 6, 2020, Skillsoft obtained confirmation of the amended Plan, which became effective on August 27, 2020. The Plan reduced Skillsoft’s debt burden by roughly $1.5 billion and eliminated about $100 million in annual interest payments. The reorganized company now has a total debt of approximately $585 million. The lenders, including the ad hoc group, have also retained the opportunity to participate in a potential sale of the business to the Interested Party shortly following the effective date of the Plan.
The Milbank team was led by partners Evan Fleck, Yushan Ng and Jacqueline Ingram (Financial Restructuring), and includes partners Albert Pisa, (Alternative Investments), Russell Kestenbaum (Tax), Bob Kennedy (Corporate), Mike Shah (Executive Compensation and Employee Benefits), and Brett Nadritch (Capital Markets), and associates Sarah Levin Yuliya Zahorod (Financial Restructuring), among other Milbank attorneys.
